STOCKHOLM--Finnish steel company Outokumpu Oyj (OUT1V.HE) said Monday it is submitting a new proposal to the European Commission related to its intended acquisition of Inoxum, the stainless steel unit of Germany's ThyssenKrupp AG (>> ThyssenKrupp AG).
The commission has told Outokumpu that an initial remedy proposal announced on Sept. 20, which included the divestment of its Swedish melting and coil operations, may not be sufficient to permit the approval of the Inoxum deal.
Outokumpu is therefore submitting a new remedy proposal under which the Inoxum stainless steel mill in Terni, Italy would be divested, and selected European service centers would not be part of the merged group.
"Strategic importance and our commitment to the Inoxum transaction remain unchanged despite the EU Commission's new demands," said Mika Seitovirta, Outokumpu's chief executive.
In January this year, the company announced that it intended to buy Inoxum for 2.7 billion euros ($3.54 billion), but the EU Commission said approval for the proposed acquisition would require Outokumpu to divest part of the combined operations of Inoxum and Outokumpu.
On Sept. 20, Outokumpu proposed the divestiture of its Swedish melting and coil operations in Avesta, Nyby and Kloster, as well as part of its European sales network. The proposal also included additional cold rolling capacity to be added in Avesta.
The commission is expected to promptly commence market testing to form a view on the suitability of this alternative remedy, the Finnish company said. No definitive agreements or decisions have been reached at this time.
The commission's review process is expected to continue until Nov. 16 and Outokumpu is aiming to finalize the transaction by the end of 2012.
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